In recent years, financial institutions have become increasingly diversified. Banks, for example, now offer a wide variety of products and services not previously available. These new products and services fall into two broad categories--new technologies for interacting with the financial institution and new financial services or "PRODUCTS" offered by the financial institution.
Innovative technologies for interacting with banks include the now ubiquitous automatic teller machines and customer activated terminals (ATMs and CATS) and, more recently, screen phones, personal computers configured for banking, personal digital assistants, voice response systems, and smart cards. Technology in existence today allows bank customers to access their banks from any place at any time. Notwithstanding these technical advances few bank customers take advantage of the full range of access points.
Financial institutions have also begun to offer a broader range of traditional banking accounts as well as investment and financial services. The traditional marketing approach of banks has been to try to enroll customers in new accounts, typically checking or savings accounts. Then, when the bank offers additional financial products or services, the bank tries to cross sell new accounts to customers having existing accounts with the bank.
One barrier caused by traditional account opening and cross selling of new accounts is that the customer must repeatedly provide the bank with the same data. This is very inconvenient and inconvenience is a significant obstacle in marketing of financial services.
Financial service is very much an inertia business. Once a customer opens an account, he or she is unlikely to change that account because of the effort involved. Most people don't shop for financial services. Instead, something in a customer's life occurs to cause a customer to make a change or be open to a change. There are moments in life when inertia is overcome; either by moving, death, formation of a family, a customer gets so angry at something that the customer decides to make a change, or other event occurs. Thus, at the moment a customer opens an account they are open to new components, but it is difficult to open a customer up again. For this reason, cross selling financial services is very difficult. Once a person has a set of accounts, then something's got to happen in their life to cause them to open up another account.
To overcome these obstacles, the focus of the present invention is to build a relationship with the customer rather than opening stand alone accounts for the customer. Studies have shown that as a customer's relationship with a bank broadens, the customer's balances increase. The present inventors have found that one way to establish a long term relationship with a customer involves opening a single account in which the customer has access to a full range of services at once.
There have, of course, been attempts to provide linked account structures in the past. The Citicard account, introduced in 1976 and 1977, was the first account that allowed four or five accounts to be mechanically linked together. A simple transactional account, short term savings, day-to-day savings, and 90-day savings, checking and checking plus line of credit were all linked in the Citicard account. Over the next ten years, other banks copied this approach and began offering "linked accounts," which are essentially transactional banking accounts with some saving components and perhaps a line of credit--a very traditional banking product.
Another significant development was the asset management accounts offered by certain brokerage firms. These accounts offered a plurality of securities components in a single account. The brokerage firms were not, however able to offer traditional banking services. One example is Merrill Lynch's cash management account (CMA). Aspects of this account are described in U.S. Pat. Nos. 4,346,442 to Musmanno; U.S. Pat. No. 4,376,978 to Musmanno; U.S. Pat. No. 4,597,046 to Musmanno et al.; U.S. Pat. No. 4,674,044 to Musmanno et al.; U.S. Pat. No. 4,774,663 to Musmanno et al. and U.S. Pat. No. 5,270,922 to Higgins. The account offered by Merrill Lynch was limited to securities transactions and did not include full banking products.
Similarly, when a customer opens a brokerage account, there is no need to open a separate account for trading equities or for trading fixed income.
The next development in the evolution of Citibank's account was the so-called asset network account that included a full range of brokerage services and, in addition, full banking services. This form of account originally known as FOCUS has become known as the CitiGold Account. This account, like brokerage accounts, was intended for sophisticated investors. The central feature of the account was sweeping funds into a money market account on a daily basis. Such an account is not, however, suitable for a broad market account that includes unsophisticated investors. The CitiGold Account also did not include credit cards as a component of the account. The CitiGold was an elite account intended for sophisticated investors.
The CitiGold Account system introduced the idea of integration and consistent presentations across the entire range of customer access points, including ATM machines, automated voice response systems, phone operators, staff screens, home banking on a computer, home banking on a screen phone, etc. In other words, in every contact with the financial institution, the customer sees the same presentation of the account and the same capability to do the transactions.
Another step in the evolution of the Citibank account was the CitiOne account, introduced in the early 1990's. This account permitted linking of transaction accounts, certain traditional banking accounts and bank saving accounts so the customer could access all these accounts. In some regions the CitiOne account included securities or loan services such as line of credit services.
With the Citione account, customer's accounts could be linked together randomly so that the financial institution's different products and services could be linked together and appear on a customer's statement. This was done on an ad hoc basis depending on a customer's desires. The basic features available in the United States were checking, day-to-day savings, and insured money market accounts, certificates of deposit (CDs) and credit cards.
The next step in the evolution was the Citibank Money Management Account (CMMA), introduced around January 1993. The CMMA allows customers to link separate accounts and to perform a wide variety of financial transactions including traditional banking activities, brokerage activities and loan activities. Again, individual customer accounts could be linked to form an ad hoc mixture of product features. The system categorized those features within categories such as "your money in the bank," "securities," "borrowing and loan," "credit cards" and the like. Among other things, the CMMA allows banking customers the convenience of "one-stop" shopping. Efforts were also made to provide consistent presentation. For example, on the screen phone and in personal computing banking, the top menu was made to look like the same menu on an ATM machine. However, after the initial screen, the systems diverged.
Notwithstanding the opportunities offered by the Citione and CMMA accounts, there is still significant room for improvement. Specifically, the present inventors recognize that while some of the infrastructure is in place, the understanding and concept of a single account that includes all of these features has not yet been achieved. The accounts were still linked on an ad hoc basis and customers were required to open up individual accounts. This required effort in educating customers about these accounts and in selling these accounts.
As with technological advances in remote delivery products, these new accounts offer the possibility of realizing improved customer services and significant operating efficiencies and reduced cost. Again, however, the potential benefits to be obtained from using an integrated financial system such as the Citibank Money Management Account have not yet been fully realized.
There are several deficiencies in currently available financial systems that might contribute to the less than full realization of the benefits offered by new technologies and services. To begin with, existing systems are not as user friendly as they could be. Although customers are able to access the system in a variety of ways, doing so requires that the customer possess certain skills, e.g., computer literacy, or a degree of technical competence that not all potential customers possess. Thus, there is a need to simplify the system for accessing the variety of services.
In addition, customers are not always aware of the variety of services offered by a bank. While banks frequently advertise and promote such services in their branches and elsewhere, not all customers pay attention to or are receptive to such promotional activities. Perhaps more significantly, the promotional efforts do not necessarily reach the customer at the time that they are open to change.
Thus, there remains a need for an improved integrated system for providing financial services. More specifically, there remains a need for an improved system for accessing a financial institution and for setting up customer's accounts within a financial institution.